From the way I see it, Hoge is in the cat-bird seat. Here's Shiba Inu's Only Path to $1 | The Motley Fool

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Controversial meme-token Shiba Inu (SHIB -2.67%) rose to prominence during the retail investor frenzy of 2021. For the year, it generated a return of 43,800,000%, blowing every other asset class out of the water, including other cryptocurrencies.

In dollar terms, that would've turned an investment as small as $2.29 into $1 million. For context, the same $2.29 investment in crypto-leader Bitcoin would've grown to a measly $3.65 since that token only appreciated 59.8% for the year.

But much of the air has come out of Shiba Inu since hitting its all-time high of $0.000089 back in October. In fact, it's down 86% from that point to just $0.000012 per token today. The Shiba Inu community is still hopeful for a resurgence, so what really stands in the way of the token rocketing toward $1?

Image source: Getty Images.

Here's what the math says

Shiba Inu faces many hurdles, from a lack of adoption to incoming regulation, but it's not suffering those issues alone. The same problems are very much plaguing the entire cryptocurrency industry. Even the leading tokens have failed to garner mainstream support from businesses or consumers as payment mechanisms.

Shiba Inu's primary barrier to reaching $1 is, instead, its enormous supply. There are 589 trillion tokens in circulation, so at the current price of $0.000012, their total combined value stands at $6.9 billion right now. If Shiba Inu rose to $1 per token, simple math dictates their total value would soar to $589 trillion.

There are a few problems with that number. Firstly, it would make Shiba Inu 264 times more valuable than Apple, which is the largest company in the world and makes smartphones, computers, and a plethora of other products. It's unlikely that Shiba Inu -- which produces absolutely nothing -- is deserving of such a lofty valuation.

But the idea gets more ridiculous when considering the current net value of all the recorded wealth on Earth right now. That number is in the vicinity of $431 trillion, which means if every individual, business, and government converted all their cash and assets into Shiba Inu, that would only warrant a price of $0.73 per token.

The solution, therefore, seems pretty simple: Take as many Shiba Inu tokens out of supply as possible.

Enter the metaverse

The metaverse is a collection of worlds hosted within the realm of virtual reality, and Shiba Inu's developers have created one for their community. It's set to feature an exclusive area for Shiboshi non-fungible token (NFT) holders, games, and over 100,000 virtual land plots. Transactions inside the SHIB Metaverse will be facilitated using Ethereum, but Shiba Inu tokens will play a unique role that could help to reduce supply.

Owners of virtual land will have the ability to assign a name to their plots in exchange for a fee paid with Shiba Inu tokens. Those tokens will then be "burned" -- that is to say, removed from circulation forever. As supply falls, the price of each token will need to gradually rise to maintain Shiba Inu's current market valuation of $6.9 billion. Put simply, if 10% of the 589 trillion tokens are burned, each token would organically become 10% more valuable (in theory).

But how many Shiba Inu tokens need to be burned for the price to reach $1?

More than you think

Assuming Shiba Inu's total value of $6.9 billion remains the same, the existing supply of 589 trillion tokens will need to shrink to just 6.9 billion. That's a reduction of 99.99998%.

But even if that happens, the result might not be what investors expect. For it to work, every holder of Shiba Inu will need to burn 99.99998% of their tokens, which means the overall value of their position would remain exactly the same. The organic rise in value to $1 per token would be completely offset by the enormous reduction in the number of tokens they own.

The only way to create actual value is for Shiba Inu to find a form of real utility that could trigger greater adoption. If people don't have any need to own Shiba Inu, then it will merely remain a vehicle for speculation.

As it currently stands, there's no basis for Shiba Inu to rise to a $589 trillion valuation, and therefore, $1 per token is completely out of the question. Still, a mass burning could get the price to $1 cosmetically, even if it means nothing in reality.